Insurance Claims Handling Laws in Victoria
If your insurance claim is delayed, underpaid, or mishandled, you now have stronger legal protections. At Bastion Legal, we help clients hold insurers accountable and secure the compensation they deserve.
Your Rights
Insurance claims must now be handled as a financial service under the law.
Requirements
Insurers must hold an AFS licence and act fairly, honestly, and efficiently.
Why It Changed
Reforms followed the Royal Commission to stop delays and unfair practices.
How We Help
Challenging delayed or mishandled claims with clear advice and strong representation.
Your rights under insurance claims claims
Insurance claims in Australia are now legally recognised as a financial service under the Corporations Act 2001 (Cth). This means insurers and their representatives must be licensed and meet strict standards of fairness, honesty, and efficiency when handling claims.
These protections apply to both policyholders and third-party beneficiaries. If you’re making or responding to a claim, the law requires insurers to act properly — and gives you rights if they don’t.
Why the law changed
Stronger protections for consumers were introduced after the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Commission found insurers often mishandled claims, leading to delays, underpayments, and unfair outcomes. In response, the Government removed exemptions that previously allowed insurers to avoid accountability.
Now, insurers must hold an Australian Financial Services (AFS) licence to handle or settle claims. Failing to do so is an offence. More importantly, licensed insurers must comply with their obligations to treat you fairly — or risk serious regulatory action..
FAQ
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If you are having difficulties with an insurer or their agent during any stage of your claim, you may be entitled to report misconduct or raise concerns about how your claim is being handled.
Misconduct in claims handling can include:
Delays in assessing or paying your claim
Failure to provide clear information or reasons for decisions
Pressure to settle for an inadequate amount
Misleading conduct during the claims process
The consequences for the insurer can be serious, and you may be entitled to further remedies or review of your claim.
A "domestic building contract" means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor.
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ASIC is the national regulator responsible for overseeing financial services in Australia. This includes monitoring licensed insurers and claims handlers to ensure they comply with the law.
ASIC has broad powers to investigate misconduct and take enforcement action, which may include:Suspending, cancelling or varying an AFS licence
Issuing a banning order that prohibits an individual or organisation from providing financial services or operating within the financial services industry
These powers are outlined in Regulatory Guide 98, which explains how ASIC protects consumers from misconduct in the financial services sector.
The ASIC Regulatory Guide 98 entitled ‘ASIC’s powers to suspend, cancel and vary AFS licences and make banning orders’ issued November 2022 states:
ASIC’s powers to take action to protect investors and consumers may involve the use of an administrative remedy, which may be in addition to civil or criminal remedies.
According to Regulatory Guide 98.1, ASIC’s administrative powers relate to:
Suspending, cancelling or varying an AFS licence under sections 914A, 915B and 915C of the Corporations Act; and
Making a banning order under section 920A of the Corporations Act, prohibiting a person from:
a) providing financial services; or
b) controlling, or performing functions involved in carrying on, a financial services business (including, for example, as an officer or employee).
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The law applies to most insurance claims, including personal, property, business, and third-party claims.
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It is an offence for an insurer to handle claims without an AFS licence. We can advise you on next steps.
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They may face regulatory action. You may also have grounds to challenge their decision or seek remedies.
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Yes. Even if you are not the policyholder, you may still be protected.
How we can help…
At Bastion Legal, we act for clients whose insurance claims have been delayed, underpaid, or mishandled. We understand the strategies insurers use and know how to push back effectively.
We provide clear advice on your rights, gather the evidence needed to challenge unfair decisions, and represent you in negotiations or proceedings if required. With transparent costs and practical strategies, we work to secure the fair outcome you’re entitled to under the law.
“I thought there was no hope for me to win this case, but Dean Charalambous was the only hope I had…”
Dean is not only a lawyer, but he is a human being in the truest sense of the word who helped me to solve this issue. His strategic approach and attention to detail were truly exceptional. His unwavering support and professionalism not only won my case but also brought great relief during a challenging time finally I can see the light end of the tunnel. I am immensely thankful and a really appreciate for your hard work and commitment.
- Carolin
Contact us
At Bastion Legal, we act for individuals and businesses who are experiencing problems with insurance claims handling. We understand the law, your entitlements, and how to hold insurers accountable.
We offer a free initial consultation with no obligation, where our experienced team will clearly explain your rights and the legal options available to you.
Whether you are in the middle of a delayed or disputed insurance claim, or you believe the insurer is not acting fairly, we can help.
* Reforms under the Building Legislation Amendment (Buyer Protections) Bill 2025 are not yet in effect; the information above reflects the current law.